danaher 03-4QREL
- 1. DANAHER CORPORATION 2099 PENNSYLVANIA AVENUE, N.W. TH 12 FLOOR WASHINGTON, D.C. 20016 TELEPHONE (202)-828-0850 FAX (202)-828-0860 FOR IMMEDIATE RELEASE CONTACT: Andy Wilson VP – Investor Relations (202) 828-0850 DANAHER CORPORATION REPORTS RECORD FOURTH QUARTER AND 2003 RESULTS WASHINGTON, D.C., January 29, 2004 -- Danaher Corporation (NYSE:DHR) announced today results for the fourth quarter and year ended December 31, 2003. Net earnings for the fourth quarter of 2003, including the impact of a gain related to the curtailment of the Company’s cash balance pension plan of $0.09 per share, were $169.9 million, or $1.06 per diluted share, compared with $161.7 million, or $1.03 per diluted share for the fourth quarter of 2002, including the effect of unusual items. Net earnings for the fourth quarter of 2003, excluding the pension curtailment gain, were $155.4 million, or $0.97 per diluted share, a 23% increase over the comparable earnings per share amount for 2002. Excluding the effect of unusual items, net earnings for the 2002 fourth quarter were $124.4 million, or $0.79 per diluted share. As indicated in the reconciliation presented below, the unusual items affecting the fourth quarter of 2002 include benefits resulting from unused reserves associated with restructuring programs announced in the fourth quarter of 2001, a lower effective income tax rate and the reduction of income tax reserves related to a previously discontinued operation. Sales for the 2003 fourth quarter were $1,488.8 million compared to $1,275.0 million for the fourth quarter of 2002, an increase of 17%. Net earnings for the full year 2003 including the effect of all unusual items were $536.8 million, or $3.37 per diluted share, compared with $290.4 million, or $1.88 per diluted share for 2002 (which includes a charge of $173.8 million or $1.10 per share related to a change in accounting principles). For 2003, net earnings excluding the effect of unusual items were $521.7 million, or $3.28 per diluted share, a 20% increase over comparable earnings per share for 2002. Excluding the effect of unusual items, earnings for the full year 2002 were $426.1 million, or $2.74 per diluted share. The unusual items impacting the full year 2003 included the pension curtailment gain as well as gains on the sale of real estate. The unusual items impacting the full year 2002 included the items described above with respect to the 2002 fourth quarter as well as a change in accounting principles and gains on the sale of real estate. Sales for 2003 were $5,293.9 million compared to $4,577.2 million in 2002, an increase of 16%. H. Lawrence Culp, Jr., President and Chief Executive Officer, stated, “We are pleased to report record fourth quarter and full year results. Total sales for the quarter grew 17%, including a 6% increase in revenues from existing businesses, the largest such increase since the third quarter of 2000. We experienced strong gains in both our process/environmental controls and our tools and components segments. We have again achieved record cash flow with 2003 operating cash flow totaling $861.5 million, a 21% increase over the 2002 level of $710.3 million. As signs of an economic recovery become more broad-based, we are again optimistic about our ability to outperform in 2004.” Danaher Corporation is a leading manufacturer of Process/Environmental Controls and Tools and Components. (www.danaher.com) Statements in this release, including the attachments to this release, that are not strictly historical may be “forward- looking” statements, which involve risks and uncertainties. These include risks and uncertainties relating to customer and supplier relationships and prices, competition, market demand, litigation and other contingent liabilities, the integration and operation of acquired businesses, and economic, political, governmental and technological factors affecting the Company's operations, markets, products, services and prices, among others, as set forth in the Company’s SEC filings.
- 2. DANAHER CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INCOME STATEMENT DATA (in thousands, except per share amounts) Quarter Ended Year Ended 12/31/03 12/31/02 12/31/03 12/31/02 Net earnings before unusual items $ 155,377 $ 124,443 $ 521,675 $ 426,061 Pension curtailment gain, net of tax 14,625 -- 14,625 -- Gains (losses) on sale of real estate, net of tax (56) 609 534 3,940 -- 2,520 -- -- Effect of lower tax rate on prior quarters (A) After-tax impact of restructuring charge -- 4,140 -- 4,140 Reduction of tax reserves related to previously discontinued operation -- 30,000 -- 30,000 Effect of accounting change, net of tax, SFAS 142 -- -- -- (173,750) Net earnings $ 169,946 $ 161,712 $ 536,834 $ 290,391 Diluted net earnings per share before unusual items $0.97 $0.79 $3.28 $2.74 Pension curtailment gain, net of tax 0.09 -- 0.09 -- Gains on sale of real estate, net of tax -- -- -- 0.02 -- 0.02 -- -- Effect of lower tax rate on prior quarters (A) After-tax impact of restructuring charge -- 0.03 -- 0.03 Reduction of tax reserves related to previously discontinued operation -- 0.19 -- 0.19 Effect of accounting change, net of tax, SFAS 142 -- -- -- (1.10) Diluted net earnings per share $1.06 $1.03 $3.37 $1.88 (A) Represents the effect on the fourth quarter of 2002 of lowering the full year effective income tax rate to 34% from 34.5% used during the first three quarters of 2002. This reconciliation is presented to quantify the financial impact of unusual items on net earnings and net earnings per share. Since these unusual items have the impact of increasing reported net earnings (with the exception of the change in accounting principle), we believe it is important to quantify the impact these items have on reported results to enable the reader a better understanding of the earnings trends excluding these items. These measures should be read in combination with the overall financial results presented in the Statement of Earnings for the periods presented.
- 3. DANAHER CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (in thousands, except per share amounts) Quarter Ended Year Ended 12/31/03 12/31/02 12/31/03 12/31/02 Net sales $1,488,778 $ 1,274,978 $5,293,876 $ 4,577,232 Cost of sales 884,499 769,435 3,154,809 2,791,175 Selling, general and administrative 364,670 305,872 1,316,357 1,097,365 (Gains) losses on sale of real estate 83 (952) (785) (6,157) Gain on pension plan curtailment (22,500) (22,500) Restructuring expenses -- (6,273) -- (6,273) Total operating expenses 1,226,752 1,068,082 4,447,881 3,876,110 Operating profit 262,026 206,896 845,995 701,122 Interest expense (15,046) (14,497) (59,049) (53,926) Interest Income 2,941 3,346 10,089 10,272 Earnings before income taxes 249,921 195,745 797,035 657,468 Income taxes 79,975 64,033 260,201 223,327 Net earnings before effect of accounting change and reduction of income tax reserves 169,946 131,712 536,834 434,141 Reduction of income tax reserves related to previously discontinued operation -- 30,000 -- 30,000 Effect of accounting change, net of tax, adoption of SFAS No. 142 -- -- -- (173,750) Net earnings $ 169,946 $ 161,712 $ 536,834 $ 290,391 Basic net earnings per share: Net earnings before effect of accounting change and reduction of income tax reserves $ 1.10 $ 0.87 $3.50 $ 2.89 Add: Reduction of income tax reserves -- 0.20 -- 0.20 Less: Effect of accounting change -- -- -- (1.16) Net earnings $ 1.10 $ 1.07 $ 3.50 $ 1.93 Diluted net earnings per share: Net earnings before effect of accounting change and reduction of income tax reserves $ 1.06 $ 0.84 $ 3.37 $ 2.79 Add: Reduction of income tax reserves -- 0.19 -- 0.19 Less: Effect of accounting change -- -- -- (1.10) Net earnings $ 1.06 $ 1.03 $ 3.37 $ 1.88 Average common stock and common equivalent shares outstanding: Basic 153,984 152,607 153,396 150,224 Diluted 162,634 160,328 161,570 158,482 These statements are presented for reference only. The final audited statements will include footnotes, which should be referenced when available, to more fully understand the contents of these statements.
- 4. DANAHER CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands) As of December 31, ASSETS 2003 2002 Current assets: Cash and equivalents $1,230,156 $ 810,463 Trade accounts receivable, less allowance for doubtful accounts 868,097 759,028 Inventories 536,227 485,587 Prepaid expenses and other 307,671 332,188 Total current assets 2,942,151 2,387,266 Property, plant and equipment, net 573,365 597,379 Other assets 32,562 36,796 Goodwill and other intangible assets 3,064,109 2,776,774 Other intangible assets, net 277,863 230,930 $6,890,050 $6,029,145 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Notes payable and current portion of long-term debt $ 14,385 $ 112,542 Trade accounts payable 472,994 366,587 Accrued expenses 892,624 786,183 Total current liabilities 1,380,003 1,265,312 Other liabilities 578,840 556,812 Long-term debt 1,284,498 1,197,422 Stockholders’ equity: Common stock, one cent par value; 500,000 shares authorized; 167,694 and 166,545 issued; 153,681 and 152,532 outstanding 1,677 1,665 Additional paid-in capital 999,786 915,562 Accumulated other comprehensive income (74,607) (105,973) Retained earnings 2,719,853 2,198,345 Total stockholders’ equity 3,646,709 3,009,599 $6,029,145 $6,890,050 These statements are presented for reference only. The final audited statements will include footnotes, which should be referenced when available, to more fully understand the contents of these statements.
- 5. DANAHER CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended 12/31/03 12/31/02 Cash flows from operating activities: Net earnings $ 536,834 $ 290,391 Reduction of income tax reserves -- (30,000) Effect of change in accounting principle -- 173,750 536,834 434,141 Depreciation and amortization 133,436 129,565 Change in trade accounts receivable 1,505 59,030 Change in inventories 21,061 77,544 Change in accounts payable 58,209 54,008 Change in accrued expenses and other liabilities 72,097 27,595 Change in prepaid expenses and other assets 38,402 (71,536) Total operating cash flows 861,544 710,347 Cash flows from investing activities: Payments for additions to property, plant and equipment (80,343) (65,430) Proceeds from disposals of property, plant and equipment 12,926 26,466 Cash paid for acquisitions (312,283) (1,158,129) Proceeds from divestitures 11,648 52,562 Net cash used in investing activities (368,052) (1,144,531) Cash flows from financing activities: Proceeds from issuance of common stock 50,497 512,105 Dividends paid (15,326) (13,516) Proceeds from debt borrowings 5,262 37,528 Debt repayments (150,771) (19,820) Purchase of treasury stock -- -- Net cash provided by financing activities (110,338) 516,297 Effect of exchange rate changes on cash 36,539 21,791 Net change in cash and equivalents 419,693 103,904 Beginning balance of cash and equivalents 810,463 706,559 Ending balance of cash and equivalents $1,230,156 $ 810,463 These statements are presented for reference only. The final audited statements will include footnotes, which should be referenced when available, to more fully understand the contents of these statements.
- 6. DANAHER CORPORATION and SUBSIDIARIES Segment Information Year Ended December 31, 2003 (in thousands, unaudited) Full 1Q 2Q 3Q 4Q Year Sales: Process/Environmental Controls $ 928,027 $1,014,523 $1,004,179 $1,149,957 $4,096,686 Tools and Components 268,188 284,909 305,272 338,821 1,197,190 Total $1,196,215 $1,299,432 $1,309,451 $1,488,778 $5,293,876 Operating Profit: Process/Environmental Controls $ 138,059 $ 164,281 $ 172,617 $ 199,386 $ 674,343 Tools and Components 34,639 43,663 48,502 47,017 173,821 Other (5,705) (6,733) (5,354) (6,877) (24,669) Gain on Pension Plan Curtailment -- -- -- 22,500 22,500 Total $ 166,993 $ 201,211 $ 215,765 $ 262,026 $ 845,995 Operating Margins: Process/Environmental Controls 14.9% 16.2% 17.2% 17.3% 16.5% Tools and Components 12.9% 15.3% 15.9% 13.9% 14.5% Total 14.0% 15.5% 16.5% 17.6% 16.0% This information is presented for reference only. Final audited financial statements will include footnotes, which should be referenced when available, to more fully understand the contents of this information. ###